Option Expiration

What happens to an option holder if trading on the underlying stock is halted due to pending news on the options expiration day? Does it depend on if the option is ITM?

technically, the options expire on Saturday. So, it really depends on what kind of halt you are talking about. But if the stock is halted, options usually are also (I believe the CBOE decides). I’m guessing if the option is ITM, then you will be assigned.

The only logical answer I can think of is that the option will pay out based on the last price before the halt, that is, whatever the exchange decides is the closing price. It’s inconceivable that the options would be rendered worthless.

I found the answer. If the stock is halted, TRADING in options is halted, but the option can still be exercised as it is a contract. When you excercise, you can buy the stock when it resumes trading, if it does.